The Justice Department said Friday it will stop trying to block Oracle Corp.'s hostile $7.7 billion takeover bid for rival business software maker PeopleSoft Inc.
R. Hewitt Pate, assistant attorney general for the Justice Department's antitrust division, said the government will not appeal a judge's decision rejecting the government's claim that the merger should be blocked on antitrust grounds.
"While we disagree with the district court's disappointing decision, we respect the role of the courts in the United States merger review process," Pate said.
San Francisco U.S. District Judge Vaughn Walker ruled Sept. 9 against the lawsuit filed by the Justice Department and 10 states that argued the combination of Oracle and PeopleSoft would sharply reduce competition in the business software marketplace.
PeopleSoft has been fighting Oracle's takeover attempts for more than a year. Oracle's offers have ranged from $16 to $26 per share.
The Justice Department decision does not foreclose the possibility that one or more of the 10 states involved in the case could bring their own separate appeal. There was no immediate indication Friday that any intended to do so, however.
Pate said such an appeal would face an uphill climb because the lower court's detailed findings would "receive great deference" in the 9th U.S. Circuit Court of Appeals, also in San Francisco.
Announcement of the decision comes as PeopleSoft fired its chief executive officer, Craig Conway, and replaced him with founder and chairman David Duffield. It was unclear whether that might help or hinder Oracle's takeover bid.
"I strongly believe that today's announcement is in the best interests of PeopleSoft shareholders," Duffield said of his appointment as CEO.
Since the antitrust case began, PeopleSoft has experienced a sales slowdown that has cut profits and reduced its stock price, although it recently has seen somewhat of a rebound. Oracle has said it would eliminate about half of PeopleSoft's workforce of 12,000 if the takeover occurs.